Protecting your business from ailing start ups
- September 16, 2016
- Posted by: admin
- Category: Company Blog
Doing business with start ups has its benefits. You’ll likely be getting a good deal on price and service since start ups are keen to impress new clients. And it does your CSR no harm to be seen to supporting local new businesses. But what happens when things go wrong and bad debt recovery becomes high on your agenda?
Alarming figures released by the British Business Bank show that over 30% of the £231.8 million worth of loans from the Government-backed Start Up Loans scheme was written off between September 2012 and June of this year.
In total, £72.4 million worth of loans failed to be reclaimed – almost £3 million more than the £69.7million recouped in loan payments. In total, 13,719 – of the 39,566 loans issued since the scheme began are in default or have been written off by the British Business Bank.
With so many start ups failing so soon after their launch, bad debt recovery is becoming a key issue for the many businesses who deal with new and small companies. But there’s one way to ensure all is not lost when doing business with unfamiliar new customers – a deposit.
Asking new customers for a 30-50% deposit not only shows that they’re serious and committed to a deal, but in the event of failure, it means that you’re cutting your losses from the outset.
While it may seem a little cheeky at first, drawing a deposit into all initial contracts with new customers will protect you in the long run, ensuring you only need to consider call in the debt collectors when the worst happens.
If you’re one of the unlucky ones, get in touch if you need help with bad debt recovery – we’re one of the UK’s leading credit collection agencies.